February 1, 2005

Superstores, superscams and open contracts

IN JUNE 2003, three Ontario locals of the United Food and Commercial Workers Union (UFCW) opened a contract that had been signed in June, 2000 and was to expire in July, 2006. The contract covered workers at Loblaws, Zehrs and Fortino's supermarkets.

The reason given for opening the contract was that Loblaws faced an incursion into Ontario of Wal-Mart supercentres. These stores would sell 35% Department Store-Type Merchandise (DSTM), modeled after similar stores in the United States.

To counter this marketing threat, Loblaws would have to build Real Canadian Super Stores (RCSS), staffed at wages and working conditions that allowed a competitive edge over Wal Mart. According to the union, Loblaws threatened to do this with or without union workers. The company was prepared to close conventional stores and re‑build or re‑open non-union if necessary.

Without going to their members, UFCW Local 1000A, Local 175 and Local 1977 entered into negotiations. They worked out an Appendix to the collective agreement to cover employees at RCSS's, bargaining downward to the employer's satisfaction. Before the concessionary deal could be presented to the unsuspecting membership it hung up on the issue of ratification.

Loblaws/Zehrs/Fortino's refused to continue if the union insisted on membership ratification, citing legal difficulties in the event of a turndown.

UFCW's Canadian Director, Mike Fraser, intervened and after discussions with Loblaws officials reached a compromise. Instead of ratification, the deal would require that each local president obtain a "mandate" from a "representative" number of members. Local 1977 allowed its membership to vote on the "mandate", Local 1000A asked a selected committee of 22 members for its "mandate", and Local 175 (according to member reports) did not ask anyone at all.

The deal was signed, the employers were happy, the employees of the RCSS stores got set up for future concessions, and the union claimed to have saved the entire retail grocery membership from unemployment. Wal-Mart never built the threatened supercentre DSTM stores, but UFCW members were stuck with the new deal anyway.

The union issued a lengthy leaflet outlining the deal, explaining perceived benefits for present members, and presenting it as a major accomplishment. The following points are quoted.

"Long term wage/benefit security: The union has negotiated a guarantee that the company will not propose wage or benefit concessions in the next contract negotiations and the next collective agreement will not contain any wage or benefit concessions.

This means: No wage/benefit concessions regardless of the length of the contract beyond 2006.
An unprecedented negotiating breakthrough."

This is pretty impressive stuff. Take concessions, bite the bullet and you'll be safe not only to the end of the collective agreement, but there will be no concessionary bargaining in the renewal for the next agreement. Potentially this gives a margin of safety until 2012 if the next agreement covers six years as the two previous ones did.

Then in late 2004 Loblaws threatened to close a store in the small town of Strathroy, Ontario, if the UFCW did not agree to further concessions. Scrap the previous paragraph, here we go again.
The union conducted a massive petition campaign in Strathroy and launched a suit before the Ontario Labour Relations Board. At the eleventh hour before the OLRB hearing, the union and the employer struck a deal - to open the collective agreement one year early based on the secret ballot approval of the members of the three locals for the following document agreed to by the three local presidents and Loblaws/Zehrs/Fortino's.

The members of all locals must separately approve going to the bargaining table early. If the members of one local vote against doing this, all are deemed to have voted against it.

If the members approve early negotiations and a Memorandum of Settlement is reached, the members of all locals must separately vote to ratify the settlement. If the members of one local vote to turn it down, all locals are deemed to have turned it down.

If the settlement is turned down, the collective agreements remain in force until they expire in the summer of 2006.

There will be no strike or lock‑out if agreement cannot be reached in early negotiations.

The current collective agreements remain in force until the summer of 2006, and negotiations will take their normal course. The right to strike or lock‑out remains, in accordance with Ontario labour law.

It appears the massive backlash after the 2003 deal, and the internet bashing of the UFCW by their own members on several websites, has made the union leadership a little more democratic, so they are approaching this second re‑opening of the collective agreements with kid gloves. It is interesting that this is happening at all after the supposed commitment of the employers to not introduce concession demands for years to come as lauded in the 2003 leaflet and quoted above.

It is very strange that the union seeks permission from its members to the second opening of a six-year agreement when the employer hoopla for the first opening proved to be a sham, when the employer violated not only the letter but the intent of the last deal and now wants to do it all again. Could it be that Loblaws et al really do want to keep to the letter and the intent of the last agreement and do not want concessions? Then it must be that the employers want to open the agreement so they can legally share with the employees the tremendous profits they have wrung from them. The votes are taking place in late January and early February. No doubt we will be hearing more of this.

On another note. The UFCW in Quebec have scored another victory, winning bargaining rights at another Wal-Mart store. This makes two stores organized in Quebec - a significant accomplishment.
There must be something profoundly different between conditions in the Quebec labour movement, and in particular the UFCW, and their counterparts in Ontario. Both these developments will be interesting to watch and hopefully we can provide more information in coming issues.